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Last Updated: Friday, 4 November 2005, 10:33 GMT
Equity optimism lifts BBC Global 30

By Jamie Robertson
BBC World business presenter

Wal-Mart store
Panic buying fuelled sales during the hurricane season

For once the US stocks have featured prominently among the gainers on the Global 30.

The US market has really been a disappointment for investors this year, but the European and Asian sell-off that marked this month affected the Dow only slightly.

Equities remain attractive since money is cheap with long term interest rates low, says Marc Ostwald, global strategist at Monument Securities.

"The factor driving interest rates higher, strong growth, is driving equities.

"Looking at the economy post the hurricanes, many people, including [US Federal Reserve chairman] Alan Greenspan have been surprised at how strong the economy has been.

Microsoft online

The best of the big US stocks was Wal-Mart, up 7.6%.

The whole retail sector saw sales rise 4% in September, much of that because of emergency buying as the hurricanes hit the Gulf, but the store itself said it is on target to hit a 2-4% rise in sales in October.

BBC Global 30 October 2005

Possibly the biggest boost to the shares came from an article in Barron's magazine, which said they could climb 40% next year, as higher petrol prices forced people to one-stop shop.

Du Pont, the giant US chemical company saw a turnaround in its share price, up 7% on the month, thanks to a decision to buy back $5bn of shares.

The news of the decision, along with news that it and Dow Chemical had won approval to market their genetically modified corn seed in a direct challenge to the market leader Monsanto, outweighed its first quarterly loss in two years.

Microsoft was also in the news, gaining a modest 1.3% as the battle with Google hotted up. Google is to offer Sun Microsystem's online word processing and spreadsheet functions OpenOffice with its toolbar.

Then this last week Microsoft said it would, for the first time, deliver many of its key products and services online through Windows Live and Office Live.

General Electric's weak share performance, up just 0.2% on the month, belied its bullish quarterly results and a quadrupling of its share buyback programme to $4bn.

GE says it is focusing on fast growing sectors such as healthcare, water treatment, media and consumer finance rather than laggards such as insurance.

Good looks

Procter & Gamble formally took over Gillette last month amidst much fanfare and then reported a better than expected profit increase of 4.5%.

Businessmen outside the HQ of Japan's Mizuho Financial in Tokyo
Mizuho financial was the best performer in Asia

The shares are down 6.7%, but only because they enjoyed a huge run up at the end of September just before the deal was completed.

Chief financial officer Clayton Daley told the BBC's World Business Report programme that it was shifting its products more and more towards health, beauty and personal care.

"We now have more than 50% of sales in those categories. They have higher growth rates in the market, higher gross margins, higher operational margins, less capital intensive. They're just a great place to earn returns for shareholders."

Giant Toyota

Many Asian stocks continued to shine despite some knee-trembling falls in the middle of the month.

Mizuho Financial was the best performer of the whole index, up 12.5%, as a new broom was appointed at the Japanese Economics Ministry - Kaoru Yosano - and an upbeat twice-yearly economic outlook from the Bank of Japan ignited the stock market.

Yosano is generally seen as a force for deregulation and specifically privatisation in the banking sector.

Toyota managed a 1.5% rise. It now has an overall market value that is greater than General Motors, Ford and DaimlerChrysler combined.

At the Toyota Motor Show it showcased something that looked like an electric armchair on wheels which it claimed was a car, designed for sidewalks as well as tarmac.

On a more prosaic note it had to announce Japan's biggest ever recall of 1.27 million vehicles to mend defects on brakes and headlights.

The cost is $134m, but there have been no accidents associated with the problems.

Then at the end of the month US car sale figures showed that Asian car makers had increased their market share by a staggering 5% to 40% over the last year.

Bird flu

The biggest contrast of the month came from the fortunes of Pfizer and GlaxoSmithKline.

Pfizer shares are down 13.3% on the month as net profit plunged 52%; it was the first fall in revenues in four years; its Celebrex pain killer and Neurotin epilepsy drug are selling slower than expected.

At Glaxo it was a very different story: profits for the third quarter rose 20%; it reported a 20% increase in sales of its asthma drug, Advair and 22% increase in Avandia and Avandest, its diabetes drugs.

It is getting good press for its cervical cancer treatment Cervarix, which if it is approved next year could be its next billion dollar drug.

But of course in the month that bird flu dominated the headlines, its Relenza drug has been identified as one of the favourite treatments to mitigate the effects of the virus.

However Relenza has to be inhaled which makes it less popular than the Tamiflu pill made by Roche (up 7.7% on the month).

In Europe, Nestle gained 1.9% after it embraced the concept of fair trade, introducing a Partners Blend instant coffee.

The decision is a turnaround for the world's biggest buyer of green coffee beans. It previously believed guaranteed prices stimulated over-production.

But they've had another look at the economics and seen that fair trade coffee sales are growing 20% a year in the UK alone, while instant coffee sales are falling 1% a year


BBC Global 30 intraday chart
value
change
%
5707.15
20.65
up
0.36

MARKET DATA - 11:37 UK

FTSE 100
5428.78up
22.84 0.42%
Dax
5732.06up
18.55 0.32%
Cac 40
3783.91up
14.37 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
Data delayed by at least 15 minutes



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